A smarter, more efficient government

It is not news to anyone that our nation is currently undergoing the most difficult economic situation in several generations, and no state is immune to this national economic downturn.

Last month, the Center on Budget and Policy Priorities said that at least 44 states are facing shortfalls in their budgets for this year, with at least 38 states are anticipating deficits for next year and beyond.

The center reported that 14 states have already raised taxes or taken other revenue raising measures to make up their shortfalls. At least 20 states are cutting K-12 and early childhood education and 26 states are cutting higher education funding.

Rhode Island and New York are implementing mid-year tuition hikes on students and Washington state officials are considering slashing school funding by $1 billion.

It is common knowledge that when governments face economic shortfalls, there are only three possible solutions: go into debt, raise taxes, or tighten your belt and cut spending.

When the federal government faces this problem they usually make the wrong choice, preferring to first incur mountains of debt, then to raise taxes, and rarely do they ever cut spending in any meaningful way.

That is theWashington Way. And that is the exact opposite of how we will run our government in Louisiana on my watch.

When a small business or a family in Louisiana faces economic difficulty, they are forced to find ways to cut spending. They cannot simply send their neighbors a bill or print more money; they have to tighten their belts.

Government should take this same approach.

Recently, the Revenue Estimating Conference released that our state would be facing a $341 million shortfall for the current fiscal year. We have since identified and implemented aggressive ways to eliminate this shortfall and save our state money for both the current year and into the future.

As has been widely noted, general fund expenditures in health care and higher education in Louisiana are the most vulnerable because they make up a sizable amount of the discretionary portion of the general fund.

There were reports that current year cuts for these two areas could be in the $160 million range for health care and the $109 million range for higher education. However, we worked hard to make strategic reductions in every department in order to mitigate the level of reductions in health care and higher education.

As a result of these efforts, current year spending reductions for DHH are $118 million, and higher education’s necessary cost-savings measures were reduced by half – down to $55.2 million.

Even with these cuts, both of these areas are still receiving an increase in funding over last year’s budget.

Departments statewide have identified cost-saving measures. For many departments, these savings came as a result of freezing operational expenses in travel, supplies, acquisitions, operational services and professional services, and halting or delaying the implementation of certain new initiatives.

Other savings were achieved through reductions or eliminations in lower-performing programs. These were strategic and programmatic shifts that focused on streamlining government services and producing more efficient operations.

We have also implemented a hiring freeze for many state government positions that aims to save the state $25 million.

Many of these positions will most likely be eliminated next year to continue saving costs for the state in the future.

These savings were achieved without taking money out of the state’s rainy day fund or raising taxes on you – the hardworking people that make our state run. Raising taxes on families is no way to help our state’s future.

In short, the goal is to make government do more with less. In some areas of government, cost savings were achieved by stopping the creation or expansion of new programs. State government has to be able to afford the programs we already have.

Additionally, by reducing spending this year, we can prepare to translate current fiscal year savings into sustained savings for next year and beyond.

While reductions in government spending are essential to making government more efficient, the administration will continue to pursue strategic new programs and initiatives focused on moving the state forward and making Louisiana the best place in the world to raise a family and have a great career.